Economic opportunities in the need to comply

Standards Australia may have been going through difficult financial times but the company that sells the documents created by Standards Australia is doing very well.

The Australian Financial Review on 26 May 2010 (not available online) reported on the continuing growth of SAI Global and the increasingly important role it may play in the United States’s emphasise on compliance.  The AFR reports that the company receives 22% of its revenue from the US and growth in sales is tipped to reach 22% in 2009/10.  So it is a good investment option but its influence may also be important to note for those corporate OHS professionals who operate in a world of compliance, best practice and audits.

Its presentation as part of Macquarie Emerging Leaders provides a good summary of the history and development strategy of the company.  It is clear from the information in “The Road Ahead” that OHS and risk management professionals are likely to have a knock on the door (or an email knock) from an SAI Global representative in the next few years.  The services will be particularly attractive to those who operate as part of integrate strategies or enterprise risk managers but the challenge, as with all information and service providers, is to retain control of one’s own destiny.

A service company of this type illustrates a curious corporate and human need.  As prescriptive legislation continues to decline, people still need someone to reassure them that they comply.  That line of compliance may be greying by the year but the need for a line of compliance is ever-present.  The success of SAI Global should show governments that there is a missed opportunity in establishing clear lines of compliance.  Governments may have outsourced compliance through performance-based legislation but they have also outsourced a potentially lucrative service and introduced an additional business cost by causing companies to not have confidence in their own decisions.

Kevin Jones

Categories audit, business, consultation, risk, safety, UncategorizedTags ,

7 thoughts on “Economic opportunities in the need to comply”

  1. Richard

    I think \”AFARP\”, as I have heard it referred to, requires a great deal more explanation that is provided. Most of the clarification comes from lawyers and is usually addressed to lawyers. The OHS regulators specify the criteria but usually leave it at that. Small business, particularly, struggle to understand AFARP as their main focus is on compliance. This focus, some would say narrow focus, is understandable but legislation, enhanced by the inclusion of AFARP, has made compliance harder to achieve than ever because the line in the sand is now a cloud in the sky – harder to define than ever.

    The problem with AFARP is that people may plan for AFARP rather than safety, as compliance is now too amorphous to be aimed for. AFARP allows for people to say \”do we all agree that we have implemented safety as far as is reasonably practicable? Great, that\’s it then\” but the workplace may not be safe.

    An explanation of AFARP needs to be developed that states that AFARP is not a get-out-of-jail-free card to be applied by lawyers. The context of when AFARP is relevant in safety planning needs discussion. AFARP may be something applied after action has been taken rather than before safety is reached or a safe workplace is planned for.

    There is a lot of discussion about safety culture and workplace culture but the inclusion of AFARP throughout the Australian OHS legislation will change how safety is planned, audited, measured and enforced. The popular understanding of safety compliance being a readily identifiable fact will go withe the new legislation.

    The new legislation will require compliance to be something that is decided in Court after much debate, stress and legal costs. This is contrary to what Robens intended when he designed modern OHS law in the 1970s. The new OHS legislation will increase business costs and red tape to the majority of Australian workplaces. We will need to wait to see if this also leads to an increase in workplace incidents and illnesses.

    In the context of the article above, SAI Global should be planning to be the providers of compliance clarity when, in my opinion, the providers of clarity should be the OHS regulators. I don\’t agree with the gradual outsourcing of OHS compliance to which the new OHS legislation is likely to lead.

  2. \’Pernicious stain\’ is an interesting description, what alternatives to reasonably practicable do you favour?

  3. It surprises me why we pay for legal compliance information which is not cheap and defeats the purpose as it becomes out of reach for small to medium size businesses.

    Standards Australian needs to take responsibility for the distribution of the AS and make it affordable and assessible for business; at the same time keep their profitability in house. They need to take stock of the situation and implement new business strategies

    1. Standards Australia is unlikely to get back what could have been such a \”cash-cow\”. The regular obligatory visits to the government printing office in the 1990s for the latest Act or report have gone, as printing has been outsourced and the Internet has replaced printing, in many instances.

      I think that the government should consider the model of open-source software or Creative Commons Licences for any of the OHS Standards or standards in general for that matter. Imagine how much safer workplaces and buildings would be if compliance information was shared with the people and the communities most at risk of injury and harm. It would empower the citizens to make their own decisions and make better informed decisions. I don\’t believe it would negatively affect any service companies other than, maybe, SAI Global, but as the above article shows SAI Global is relying less on its printing services to achieve its profit.

  4. Companies I have worked for have had a real problem with accepting that they should pay for legal compliance information. They do when they have to but it is a push to convince them sometimes that they need the information to assist them to comply. What are your thoughts on this?

    So much information is now in AS for how to \”Safely do\” specific tasks and obviously some are called up in legislation but the remainder are still best practice and need to be followed unless you do something equally effective (how you do this without knowing what is in them I don\’t know). Builders tend to believe it is the problem of the subby to know this and not their problem unless they are doing the particular task.

    1. I have never agreed with the decision to put standards development into private hands, particularly in the area of health and safety. Government provides a lot of information on how to manage one\’s workplace safely but it does not see it\’s role as determining compliance. As a result businesses, of all sizes, are unsure of whether they are breaking the law or complying. I don\’t believe that this is fair on business.

      When I drive a car, I know when I am breaking the law. When I cross the road I know when I am breaking the law. When I throw a rock, I know when I will be breaking the law. But when running a business, I don\’t know if I am complying with my OHS legislative obligations.!!

      Governments in Australia purport to aim at reducing red tape and business costs but, in many ways, these costs have been allowed to creep up with each set of non-prescriptive or performance-based laws.

      During my time with an OHS regulator there were specialist inspectors for boilers and pressure vessels, scaffolds, dangerous goods and plant. These inspectors had regular schedules for inspections and could respond rapidly to an emergency or issue that required their expertise. They had strong, but professional, links to the industries they \”oversaw\”.

      In the 1990s some legal expert advised the government that by certifying something was \”safe\” this allowed employers to say \”but judge, I thought it was safe because WorkSafe said it was\”. This is not the same as saying it was WorkSafe\’s responsibility. The employer still retained responsibility for their workplace and had certification as one piece of relevant information.

      Employers, perhaps lazy employers, relied on the certification rather than understanding that this was only one element of achieving a safe workplace. Their understanding of OHS law and obligations was immature and this immaturity on OHS, this lack of understanding, persists today.

      Some employers are willing to pay for compliance information but under current OHS law no one is in a position to say if anything complies or not. Any reassurances must be couched in equivocation, include a disclaimer and be covered by millions of dollars of professional indemnity insurance. OHS laws do not provide the necessary level of certainty that business operators require in order to estimate business costs and to plan for expansion and development. Sadly, as the pernicious stain of \”as far as reasonably practicable\” permeates through all Australian OHS law, the lot of the small business operator will worsen.

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